City of Johannesburg changes tune over R200 prepaid electricity surcharge

The City of Johannesburg executive changed its tune over the implementation of the new monthly R200 prepaid meter fixed electricity surcharge. Just last week Mayor Kabelo Gwamanda insisted it was here to stay while the MMC for finance, Dada Morero, now says it will be reviewed.     

Once again Johannesburg residents, particularly the poor, remain in limbo. 

The fixed rate came into effect on 1 July, along with the 12.7% electricity hike that has left many residents in a tight financial position. The R230 fee, including tax, was intended to provide revenue to fund Johannesburg’s investment in new electricity infrastructure and the maintenance of existing infrastructure. Before 1 July, prepaid residential customers did not contribute to these costs, only postpaid customers did.

Speaking during a special council meeting on Tuesday, Morero said: “We are willing to enter a process to look at this availability charge and its impact on residents, and undergo a process to review this amount.”

However, the process to review the amount remains unclear, with Morero saying the City would take into consideration the necessary and relevant legislative processes. 

“This executive brings to council a commitment to relook and review this availability charge amount,” he said. 

Last week, Gwamanda said the R200 surcharge would remain in place and had been implemented to ensure fairness with prepaid and postpaid customers. 

“The new electricity surcharge is a necessary intervention to create fairness and equality in the city’s tariffs regime. Post-paid customers have been paying the surcharge, and only prepaid customers were excluded. What the introduction of the surcharge now seeks to do is to end the unfair subsidisation of prepaid customers by post-paid customers,” Gwamanda said.  

Asked to comment on Wednesday, mayoral spokesperson, Mlimandlela Ndamase said at the time of Gwamanda’s remarks he was not “steadfast” in that nothing can change upon further engagements. “He was merely explaining the rationale, purpose and background of the decision.”

“Obviously when the MMC says there is a review then then that’s an executive decision as they speak in one voice,” he said.

Read more in Daily Maverick: Impoverished Joburgers buckle under new monthly R200 prepaid meter fixed electricity surcharge 

The new tariff and surcharge apply to all prepaid residents except the “indigent”, which is used to classify customers earning less than R6,000 a month or who have financial challenges and are registered as such in the City’s database.

However, it remains unclear how many residents are registered.  

The Organisation Undoing Tax Abuse (Outa) has long called for the scrapping of the fee, which it said would have significant financial repercussions on vulnerable communities. Outa’s manager for local government, Julius Kleynhans, said the City should implement reasonable tariffs while ensuring that it ran cost effectively. 

“It cannot pass costs on to consumers due to its own inefficiencies that it consistently fails to address, such as inadequate debt collection of conventional electricity tariffs and high electricity losses,” he said.

Opposition parties have since welcomed Morero’s pronouncement with skepticism. 

The DA’s caucus leader in the city, Belinda Kayser-Echeozonjoku, said the contradiction between what Gwamanda and Morero were saying was concerning. 

“While we understand that it might be difficult for an executive to always be on the same page, we urge the City of Johannesburg’s executive to speak from the same mouth on contentious issues that have very real implications for the residents of the City,” she said.   

Despite the concern, Kayser-Echeozonjoku said the DA would hold Morero to account, and ensure that he followed through on this commitment. 

“The DA will always be on the side of good governance, and effective management of the City’s funds – which, had it been managed correctly, would not have necessitated the executive to introduce the additional surcharge,” she said.  

Meanwhile, ActionSA’s caucus leader, Nobuhle Mthembu, said Morero's response was a step in the right direction. 

Step in the right direction